CLA-2-61:OT:RR:NC:N3:354
Jason M. Waite
Alston & Bird LLP
950 F Street, NW
Washington, DC 20004-1404
RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA), of pantyhose from Honduras.
Dear Mr. Waite:
In your letter dated May 6, 2015 you requested a ruling on the status of pantyhose from Honduras under the DR-CAFTA.
Your request states that Style 1442 is composed of 46% spandex yarns and 54% nylon filament yarns. You state that the spandex yarns are made up with three gimped yarns with elastomeric cores and nylon coverings. These are formed in the United States. You state that, of the nylon filaments, 86% are formed in Israel (HTSUSA # 5402.45.90) and 14% are formed in the United States (HTSUSA # 5402.31.00).
The pantyhose are made from two knit-to-shape tubes which are knitted entirely in Honduras. The tubes themselves have three separate sections or components-the waistband, the panty and the legs. The narrower end of the tubes will be sewn closed in Honduras to form the toe of the hosiery. The top of each of the tubes will then be slit and the tubes sewn together around a gusset to form the upper, or panty, component of the panty hose. You state that all cutting and sewing operations will occur in Honduras and the finished goods will be shipped directly from Honduras to the United States.
Since the majority of the single yarns in style 1442, or 54%, measure less than 67 decitex, the applicable tariff provision for the pantyhose will be 6115.21.0020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for panty hose, tights, stockings, socks and other hosiery, including graduated compression hosiery…and footwear without applied soles, knitted or crocheted, other panty hose and tights, of synthetic fibers, measuring per single yarn less than 67 decitex, other. The general rate of duty will be 16% ad valorem.
General Note 29, HTSUS, sets forth the criteria for determining whether a good is originating under the DR-CAFTA. General Note 29(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good under the terms of this note if—
(i) the good is a good wholly obtained or produced entirely in the territory of one or more of the parties to the Agreement;
(ii) the good was produced entirely in the territory of one or more of the parties to the Agreement, and—
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or
(B) the good otherwise satisfies any applicable regional value content or other requirements specified in subdivision (n) of this note;
and the good satisfies all other applicable requirements of this note; or
(iii) the good was produced entirely in the territory of one or more of the parties to the Agreement exclusively from originating materials.
General Note 29 (n) states goods qualify for DR-CAFTA preferential treatment when undergoing a prescribed change in tariff classification rules. General Note 29 (n) Chapter 61 Note 38 states
A change to headings 6114 through 6116 from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, headings 5508 through 5516 or 6001 through 6006, provided that the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties.
From General Note 29 (n) we read that the foreign component, nylon filament yarns from Israel, do not undergo the prescribed change in tariff classification rules. However, General Note 29(d), HTSUS, states, for textile and apparel goods
A textile or apparel good that is not an originating good under the terms of this note, because certain fibers or yarns used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification set out in subdivision (n) of this note, shall be considered an originating good if—
the total weight of all such fibers or yarns in that component is not more than ten percent of the total weight of that component; or
such yarns are nylon filament yarns (other than elastomeric yarn) provided for in subheading 5402.11.30, 5402.11.60, 5402.19.30, 5402.19.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.45.10, 5402.45.90, 5402.51.00 or 5402.61.00 of the tariff schedule from a country that is a party to an agreement with the United States establishing a free trade area which entered into force before January 1, 1995.
Notwithstanding the preceding sentence, a textile or apparel good containing elastomeric yarns in the component of the good that determines the tariff classification of the good shall be considered to be an originating good only if such yarns are wholly formed in the territory of a party to the Agreement.
Israel, the country of origin of 86% of the nylon filaments, was a party to an agreement with the United States establishing a free trade area which entered into force in 1985. Therefore the yarns are considered to be originating, in accordance with HTSUS General Note 29 (d). According to your letter, the gimped yarns are produced in the United States, a party to the agreement. All other processes are performed in Honduras.
Based on the facts provided, the goods described above qualify for DR-CAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 29(b)(ii)(A) and HTSUS General Note 29(d). The goods will therefore be entitled to a free rate of duty under the DR-CAFTA upon compliance with all applicable laws, regulations, and agreements.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
Your sample will be returned to you under separate cover.
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist K. Lenore Ort at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division